IMO, the silly thing about NM cable not being permitted damp locations is that if manufactures would just disclose outright that the conductor insulation is in fact THHN, as we all suspect it is, the argument for keeping this restriction in the NEC loses it's validity, since THHN is listed for both dry and damp locations at the full 90-degree C in Table 310.13A.
Updating the UL listing to acknowledge this shouldn’t be a problem, since the feared insulation degradation due to moisture obviously wouldn’t be a problem when used in damp locations, even if the paper filler strip becomes dampened.
I think this would go a long way toward curbing ridiculous installation conflicts similar to what was described in the OP.
I know, I know... dream on, right?
